Shippers using contracts to shift burdens of food hauling regs to carriers

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Small fleet compliance with stipulations outlined in the Food Safety Modernization Act is required as of April (larger fleets’ compliance deadline was a year earlier). The law doesn’t really change best practices around refrigerated food hauling, but it does put new burdens on shippers and receivers to ensure quality of food products during the loading and delivery process.

Despite much of the burden of new FSMA-related compliance falling on shippers of perishable foods, there’s some evidence of overbroad interpretation of the rules and willingness of shippers to use contracts to “cram down” that responsibility on carriers, says Henry Seaton, a transportation attorney. “Some particularly large food shippers have concluded wrongly … that FSMA requires shipments in which seal integrity has been compromised to be dumped.”

CCJ‘s Aaron Huff covered this practice by shippers more in depth last year at this link.

These contracts can lead shippers and receivers to refuse refrigerated loads and then blame the carrier for the loss — sometimes tens of thousands of dollars that small carriers can’t absorb, says Seaton.

Generally, carriers are responsible for being able to provide upon request by any broker or shipper/receiver (and any loading and unloading personnel) information about previous loads hauled in any trailer, documentation of the vehicle’s cleaning (for instance, wash-out receipts could be asked for) and proper pre-cooling.

“If a shipper makes a more rigid requirement [in a contract with a carrier] that has nothing to do with the freight’s [quality], they can dump the product,” says Seaton. “If it’s rejected because it’s five hours late getting to [the destination], they want it trashed. The small carrier that signs that contract – and doesn’t have insurance for that [loss] — and if the carrier doesn’t have the right to inspect,” then it becomes an uninsured loss, he says. “A contract is a risk-transfer device – a small carrier can’t afford to assume an un-insurable risk. For a guy who’s got two trucks, a $40,000 claim, and he needs the money to operate, the legal system doesn’t give him any recourse.”

The “mischievous thing” about the language in these contracts, says Seaton, is “it’s not what the law requires.”

“The practice of simply rejecting edible food products and requiring dumping is unconscionable and unsustainable.” Such contract provisions “are typical of the type of contract cram-down that is becoming all too frequent with the full implementation of FSMA.”